Thread 17946438

What happens when a city defaults on it's debt? What would have happened if there hadn't been an economic turnaround for the city? Reading about this and how bad things were in the city in the 70's, with the city planning on rationing it's limited budget to a handful of the least bad neighborhoods, the blackout, the infamous 'Ford to City Drop Dead', it taking almost twenty years to recover the population it lost in the time, it's just kind of alien reading that all this happened to one of the most famous cities in the world

Stockton California is what happens. I'm pretty sure it's among the top 5 worst cities in terms of crime across the board.
New York recovered because it's a huge hub. But when it happens to a smaller city, it never recovers.

>>17946461
for example South Bend, Indiana. did not recover from the end of Studebaker.

>>17946438 (OP)
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>>17946438 (OP)
>Ford to City Drop Dead
You're referring to Mr. Ford vowing to veto a federal bailout package for NYC, the President never said the words, 'drop dead'
>What happens
The same thing that happens when a person goes bankrupt, borrowing becomes more expensive or kimpossible, although I kind of disagree with
>>17946461
Cities dont fail like a car gets in a car crash at 70 mph and crumples into a crushed soda can, good government can get a city, especially a city in a cuntry as rich and developed as the US out of a lot of problems, the fact of the matter is, NYC really did reform its spending and taxation practices from completely unworkable to not great and apparently that was enough, NYC is, objectively speaking a rich and successful city now
>one of the most famous cities in the world
Yeah, socialist retards who dont understand that you have to pay for things with money are everywhere but for some reason they fucking love New York

>>17946496
>good government can get a city
no it can't. you're trying to twist what i said into a muh democrat socialist commie evil satanist jew hating neoreactionary starbucks avocado toast eater ccp bbc sbc evil totalitarian big gubmint hitlerists ruining california but that's just not the issue. stockton is a shithole dump because this country's economic system is a joke and does nothing to help anyone
>NYC is, objectively speaking a rich and successful city now
yes and it's also the highest revenue producing city in the entire country you genius.
if this exact scenario played out in chicago, that place would NEVER recover.

>>17946487
can you please make a zip of all your infoblobs so i don't have to hunt you across threads

>>17946438 (OP)
>>17946496
why couldn't they just print money like the gubmint did in 2008? Seems like the bailouts served their purpose of averting catastrophe, the biggest argument against them is that it encourages bad behavior.

>>17946578
>why couldn't they just print money like the gubmint did in 2008?
I'm not sure if you are referring to the city govt or the federal govt but issuing bonds backed by NYC banks was, among other things, what got NYC into the fiscal crisis in the first place
Also, there was a federal 'bailout' of NYC, just not in 75, it was passed and signed into law in 1978, which itself wasnt just some blank check from Washington, it was $2 billion in bonds issued to the city, but because banks would not issue bonds to NYC, the loans were guaranteed by DC
>encourages bad behavior.
Yes, moral hazard was Gerald Ford's reason for denying NYC a bailout
>Seems like the bailouts served their purpose
I dont know where to start
In 08 everyone in the country got wiped out because of the massive recession, in 75 NYC was in trouble because of atrocious fiscal policy going back to the 30s
Second, Mr. Ford was right, just like with individuals and companies, bailouts do nothing or make the problems worse for cities when the underlying problems arent fixed

>>17946745
Wasn't the problem just the one-off shock of suburban development and wealthy taxpayers moving out of the city? Probably wasn't an easy thing to predict for city government.

>>17946757
>wealthy taxpayers moving out of the city?
That was part of it but you are missing the bigger picture if you just focus on NYC population decline in the 1960s
https://www.city-journal.org/article/new-york-fiscal-crisis-1970s-migrants-welfare-costs
>Even a cursory look back at New York’s budgetary practices in the decade leading up to the fiscal crisis reveals mind-boggling fiscal abuses. Year after year, a succession of mayors deliberately spent more than the city could afford, usually under the assumption that additional state or federal aid would materialize to fill the gap. If that didn’t happen, they would borrow to make up the difference.
Again, I've said this multiple times in this thread, the root cause of the crisis was poor fiscal policy on the part of the city, the details are complex but the overall diagnosis is not
Bad deals with unions lead to too much money for and hiring of city workers, too much welfare (the majority of which didnt go to the poor btw) and in a lot of cases just outright loss of money from poor accounting, which lead to tax increases, but the revenue increases didnt keep up with increases in spending, which then lead to more budget shortfalls, which lead to the city issuing bonds, borrowing money and the process would just repeat

Without an economic turnaround, NYC would be looking a lot more like Detroit.

>>17946745
>>17946794
ok but such situations are inevitable. Is it really the correct response to simply tighten bootstraps like the city/country is a disobedient child? I'm sure 2008 sucked but I don't know anyone who was ruined, granted I know mostly normal people not businessmen, whereas NYC in the 70s was and is nothing short of infamous.

There is nothing in the Constitution permitting a Federal bailout of a city government. That is not anywhere in there as an enumerated power of Congress.

The turnaround has me thinking we view NYC as inevitably indestructible because of that, rather than because at the time it had the potential to bounce back. Detroit didn't, other rust belt places didn't. I'd wonder if the financial hub would have shifted to London again or found somewhere else in the States to do so. Or if you'd just have had some kind of decentralization of the boroughs where Manhattan keeps on but Bronx and brooklyn become detroit tier favelas because the 'city' of NYC just splits up financially.

>>17946461
Stockton isn’t even that bad.